Stock Indexes Sag South; Panera Tries To Break Out

Stock indexes chalked up losses Tuesday afternoon as the Nasdaq joined the S&P 500 on the loss side.

Heading into the final hour of trade, the Nasdaq was down 0.2% after being up 0.4%, while the S&P dropped 0.5%. The Dow Jones industrial average trudged lower, losing 0.8%.

Volume in the stock market today was running higher on both major exchanges. Friday's preholiday pace made for an easy comparison.

Panera Bread (PNRA) cleared a 219.48 buy point in a shallow, cup-with-handle pattern and then fell back under the entry. Volume was weak. The pattern could be seen as a base atop a base. Panera broke out March 1 in soft volume and then rose 6% from a 208.10 buy point before beginning the current consolidation. The stock never fell more than 3% under the buy point, so individual investors who held their position could be up about 5% now.

The fast-casual restaurant-cafe-bakery chain has some things going for it and some things going against it.

On the negative side, pretax margin was 9.5% last year, the lowest in seven years. Revenue growth was 6% the past two years, down from double digits in 2010-13. Another drawback is the restaurant stock group. Restaurants rated No. 69 in six-month price performance among 197 industry groups.

On the plus side, earnings are expected to rise 8% this year and then step up to 17% growth. Cash flow is strong, and return on equity was 26% last year. The Composite Rating, which combines all five IBD ratings into a single number, is 88. A rating of 88 means the stock is in the top 12 percentile among all the stocks in IBD's database.

How does Panera Bread rate in the restaurant group? See Stock Checkup.

In the IBD 50, aerospace component maker TransDigm (TDG) gapped up 3% in heavy volume. TransDigm will join the S&P 500 after Thursday's close.

Meanwhile, China-based gaming firm NetEase (NTES) popped up 1% in strong volume. The stock is approaching a 186.55 buy point in a cup base.

Dollar Tree (DLTR), which broke out Thursday, advanced more than 1% in heavy volume as it aimed for its fifth daily gain in a row.